State News : Texas

We think it bears repeating that effective October 1, 2015, the Division is making the transition from
ICD-9 to ICD-10. The Division has a video to help participants with this transition at:
www.tdi.texas.gov/wc/hcprovider/icd10.html. As we mentioned in July, the Division has not
provided guidance on how carriers should process bills submitted with ICD-9 codes for dates of
service after 10-1-15 and has not provided any guidance to stakeholders regarding many issues that
are expected to arise. Hopefully we can update you in September. It could be quite a mess.

The Division education conferences will be held in Austin and Dallas this again this fall. The Austin
conference will be September 18 at the Renaissance Austin Hotel and the Dallas conference will be
October 9 at the Renaissance Dallas-Richardson Hotel. The Division offers continuing education
credit for adjusters. For more see: www.tdi.texas.gov/wc/events/edconference.html.

The short answer? It depends....The California Labor Commission ruled that an Uber driver who
filed a claim against the company was an employee. That ruling was limited to the facts of the
specific case in question, but could have ramifications for Uber drivers nationwide. On the opposite
coast, a New Jersey workers’ compensation judge ruled that a limousine driver in a business not
unlike Uber was an independent contractor. As the nature of the workforce continues to change in
the “gig” economy, many question whether worker protections fashioned for traditional full-time
workers provide adequate protection for the less traditional employment relationships. In Texas,
the real question is whether the company has the right to control the work performed by the
individual in question. There are currently no pending Uber-related cases in Texas. Stay
tuned..........

On 8/26/15, the Division closed the informal comment period on possible amendments death and
burial benefits rules. The proposed amendments allow eligible spouses of first responders to remain
eligible for death benefits after remarriage and to increase the maximum amount of reimbursement
for burial benefits payable in all workers’ compensation death cases from $6,000 to $10,000. The
changes would apply to injuries occurring on or after 9/1/15. Formal comments will be requested
once the rules are proposed and published in the Texas Register.

The number of doctors on the Division’s Designated Doctor List dropped in the past year from 1008
in July of 2014 to only 699 in July of 2015. Of the 699 still on the list, 250 of those doctors are
medical doctors, 37 are osteopaths and 332 are chiropractors. The number of medical doctors on
the list has dropped by half and the number of chiropractors is down by 129.
One explanation for the drop may be the “new” examination to test designated doctors’ competency
to evaluate MMI and impairment rating, which was implemented on 5/1/13. As that test would not
have been required of doctors on the list on 5/1/13 until the date there credentials expired (every 2
years) many of the doctors on the list were not required to take the test until 5/1/15.
According to many of the doctors, increased regulation and certification requirements without a
corresponding increase in the reimbursement rate paid for designated doctor examinations are
largely responsible for the drop in the number of doctors willing to perform designated doctor
evaluations.
Hopefully the new requirements will result in a smaller number of more qualified doctors. The down side continues to be a drop in the number of qualified doctors willing to travel west of I-35
to perform those examinations.

There is no limit on how much an air ambulance provider (or any other health care provider, for that
matter) can charge for its services or how often it can raise its charges. For example, one of the
largest air ambulance providers in Texas, PHI Air Medical, increased its base rate from $11,492.00
in 2010 to $26,177.00 in 2014, a 128% increase. At the same time, it increased its mileage rate from
$150.00 per mile to $290.00 per mile, an increase of 93%.

However, the lack of any restrictions on a provider’s billed charges is only a problem when it is held
that the provider is entitled to reimbursement of its billed charges. Since January 2014, the Division
has been doing just that, issuing medical fee dispute decisions holding that its medical fee guideline
does not cover air ambulance services and ordering payment of the air ambulance providers’ billed
charges on the grounds that they are “fair and reasonable.”

Many of the Division’s decisions have been appealed to the State Office of Administrative Hearings
(SOAH) where they have been assigned to Administrative Law Judge Craig Bennett. Judge Bennett
consolidated a group of early cases between PHI Air Medical and eight insurance carriers. These
lead cases will determine the legal issues for the remainder of the air ambulance cases pending at
SOAH. James Loughlin with the Firm represents seven of the eight carriers.

Judge Bennett issued a preliminary order on August 5, 2015 announcing his decision that “the
proper reimbursement rate for the air ambulance services in issue is 149% of Medicare.” This is a
great victory for the carriers because Judge Bennett has rejected the Division’s position that PHI’s
billed charges are fair and reasonable, he has concluded that reimbursement should be Medicarebased,
i.e., a percentage of the Medicare rate, and he has picked a percentage which is not much
higher in dollar terms than 125% of Medicare.

The carriers paid PHI at 125% of the Medicare rate based on their understanding that the Division's
fee guideline applies to ambulance services. The difference between the 125% paid by the carriers
and the 149% determined by Judge Bennett to be fair and reasonable is less than 13% of the amount
sought by PHI which was based on its claim that it is entitled to reimbursement of its billed charges.

Judge Bennett's decision and order which will explain his reasoning in detail is expected by the
second week of September. PHI's counsel has already indicated that PHI intends to appeal Judge
Bennett's decision to district court. Judge Bennett previously rejected PHI's argument that the
federal Airline Deregulation Act preempts Texas' workers' compensation laws governing
reimbursement to health care providers from being applied to it. This issue has national implications
for PHI.

The carriers will likely cross-appeal Judge Bennett's decision on the grounds that the fee guideline
applies and 125% is more than fair and reasonable. The carriers presented compelling, unrebutted
evidence at hearing that 125% is more than fair and reasonable. The sticking point on appeal may
boil down to the legal issue of whether the statutory standards for fair and reasonable
reimbursement, if properly interpreted, guarantee health care providers a profit.

Judge Bennett's decision will hopefully encourage the Division to move quickly to adopt a fee
guideline for ambulance services. Air ambulance fee disputes will continue to pile up at the
Division until it does so. Judge Bennett's decision will hopefully also cause the Division to
reconsider its approach to these disputes of ordering payment of the air ambulance providers’ billed
charges.

A recent workers’ compensation blog post warns, “As global warming increases, and changing
weather patterns become more pronounced, workers’ compensation insurance systems will be
stressed to limits never before imagined.” According to the post, extreme temperatures and
significant storms are already causing increased levels of occupational injuries and illnesses. So far,
there has been no word from the Division on how it intends to address global warming.

One by product of the crackdown on pain pill abuse is increased urine drug testing. Many treatment
guidelines, the ODG included, recommend urine drug testing. Some doctors and labs have
capitalized on this opportunity, turning urine drug testing into a new profit center. Many system
participants have witnessed a significant increase in the frequency of drug testing, the number of
drugs for which patients are tested, and the use of qualitative drug testing which tests for the amount
of a drug as opposed to qualitative testing which just determines the presence or absence of a drug.
Five thousand dollar urine drug testing bills are not uncommon with some bills exceeding $9,000.
Now one system participant is fighting back by having every urine drug test retrospectively
reviewed for medical necessity. This resulted in savings of $493,372.97 in one quarter alone. The
reason is because in many cases the prescribing doctor was not following the ODG either because
the doctor was testing too often, testing too many drug classes, or doing quantitative testing with no
evidence of necessity. The ODG states that quantitative urine drug testing is not recommended
without evidence of necessity.

In Denham v. Texas Mutual Ins. Co., the deceased employee tested positive for marijuana. 2015 WL
4389286 (Tex. App.–Amarillo, July 15, 2015). The carrier denied the claim based on intoxication.
The Appeals Panel upheld the denial and the employee’s beneficiary filed suit for judicial review.
In the trial court, the carrier filed a no-evidence motion for summary judgment contending that the
beneficiary had failed to present any evidence that the employee was not intoxicated. The
beneficiary responded with an affidavit from a doctor challenging the validity of the positive test
results. The court held that such evidence does not rebut the presumption of intoxication.
According to the court, the rebuttable presumption of intoxication was raised by the positive drug
test results regardless of whether the results were founded on medically and toxicologically sound
theory. Once the presumption of intoxication was raised, evidence was required that the deceased
employee was not intoxicated, such as an affidavit from his passenger that he had the normal use
of his mental and physical faculties. No such evidence was provided. Therefore, the court of
appeals upheld the trial court’s judgment in favor of the carrier.

Beginning October 1, 2015, the Texas workers’ compensation system will transition from the use
of ICD-9 codes to the ICD-10 codes. Physicians must begin using ICD-10 codes to record diagnoses
and inpatient procedures for services provided on or after that date.
The Division has created a new training video on the transition to ICD-10 codes. The video is
available on the TDI website at http://www.tdi.texas.gov/wc/hcprovider/icd10.html. The video
reminds system participants to prepare in advance for the transition.
One still unanswered question for carriers is how they should process bills submitted with ICD-9
codes for dates of service after October 1, 2015. On the one hand, if they return the bills, that could
be a potential violation. On the other hand, if they process the bill and electronically report the ICD-
9 codes, that could also be a potential violation. Another question is what carriers should do with
bills submitted with ICD-10 codes for dates of service before October 1, 2015. ICT has asked the
Division for clarification. Hopefully, the Division will provide guidance soon so that system
participants can prepare in advance for the transition.